Post-TSA: How a Consortium of Banks Can Make Nigerian Football a Multi-trillion Naira Industry

Rangers and Pillars fans garthered at the Nnamdi Azikiwe Stadium

Following the recent federal government directive to all its ministries, departments and agencies to henceforth operate through the Treasury Single Account (TSA), banks have reportedly shed over a trillion naira of cheap funds. Going forward these banks will have to look for innovative ways to generate fresh income. It is unclear at this point how they will go about this, but I have taken liberties to think up a bold new investment idea that would ensure tremendous value for the banking industry and our economy in the short to medium term. It would see the creation of thousands of new jobs, lead to the inflow of substantial foreign investments and ensure sustainable wealth for many in our country

I have in the past written about the need for Nigerian investors to think in bold new ways, much like the Arabs do. In viewing the rapidly advancing world and defining their place in it, the Arabs, who like us need to play catch-up, do not only think of big ideas, they dream up monstrosities. They are bold, daring, fearless and keen to blow down barriers and force their way into global reckoning.

Conversely, in sub-Saharan Africa we tend to think in opposite terms. We set our sights too low and are usually afraid to assert ourselves on the global stage because we think of ourselves as being corrupt, uncompetitive and backward. One of the high-value industries this mentality has punished in our country is sports. For decades our economy has lost hundreds of thousands of jobs - and the resultant wealth that would have been created - as we have failed to understand the vast opportunities inherent in this industry.

Of the sports we love in Nigeria there is none bigger than football. It is a game in which we have demonstrated that we can go toe to toe with the best in the world if we can throw some money at it. For years our leagues have been struggling, yet there is probably no other country in Africa that has as much potential as ours to have a worldwide pull. The pedigree is there; we have the talents; we have good enough facilities to start; we have the largest football-crazy population; and an economy that can support the industry. However what is lacking is the sort of visionary thinking and support from the investment community that can make the most from this. It is like we have a Porsche and think it is a Volkswagen Beetle. 

What I will attempt to do in this first part of my treatment of this topic is to introduce you to the idea of our banks getting behind our football and putting it on the world map. As I have argued in the past, the Nigerian Professional Football League has more potential than any other on the continent to become the “African League” – the league with the best clubs, best players, best managers and best crossover appeal on the continent. The NPFL can become the richest and most entertaining league in Africa. This would see an explosion in local and foreign investments which would be great value for our banks and would put food on tables around the country.
It would take a huge financial investment in the game to achieve this; the kind of investment that would ensure that over the next  10 years the smooth running of the NPFL and other fringe competitions would be guaranteed because the capital to do so would be in place. If the capital needed can be raised, clubs and players will compete for higher stakes, professionalism would experience a spike and entertainment will go through the roof. This would lead to a fresh influx of investors from around the country and the globe buying into our clubs, our academies and our talents. Crucially it would see Nigerians fall behind our domestic leagues again and with them will come the big advertisers.

At no time since we lost our way just before the turn of the century has there been a better environment to invest in football. Today the government desperately desires to move away from our oil-dependent economy and would support initiatives that can create the kind of value that football can offer our country. Investors will also find that the League Management Company that has in the last three years run our leagues, boasts a forward-thinking management that has demonstrated its desire to make our leagues successful again.

All that is needed now from where I stand is adequate financial support; not just for subsistence, but to make the NPFL become as successful as Nigerian music and movies have been. We live in a global village and Nigerian fans are exposed to the glitzy world of European showbiz football. Most of these fans have abandoned the Nigerian game as a result and we need to win them back. Until we do, we will continue to lose the jobs and the wealth football can create, and the banks will ultimately continue to be the biggest losers.
Think about it, every year Nigerian banks lose billions to their foreign competitors as football fans pump their resources into the European economies in support of these foreign clubs. They pay travel costs, they visit stadiums to watch games and spend huge sums on merchandising items. They also spend billions on TV subscriptions, ultimately paid to the UK economy from withdrawals from our Nigerian banks. While we grow poorer as a result, the billions spent end up in Barclays, Lloyds, Natwest and create more jobs and wealth overseas.

If we could make football successful in Nigeria again, this will not only stem the capital flight, it would reverse the order such that money flows into our economy. Our banks will stop losing money to their international competitors and start gaining on them by receiving monies from foreign investments. Fewer fans will see the need to spend on feeding their European football fantasies and will instead spend their funds locally to support our clubs. We saw the shift happen in music and movies, which essentially means that given the right product Nigerians find pleasure in their own.

With the right investments the NPFL can become a high stakes league with plenty of star power. High stakes lead to higher standards of competition, while stars attract fans. Because of the low stakes in our football - with our champions earning less than N80m – private investors are not interested and as such the game is left in the hands of state governments. We are then left with stars who earn a pittance and live lives that fans do not aspire to. With the fans, who are arguably the most influential stakeholder, looking the other way, private enterprise is uninterested and the game is left in the hands of government.

This situation is costing the banking industry plenty. 50,000 fans massing at the National Stadium Surulere every weekend to watch their favourite teams play would mean a lot to the Lagos economy and to the banks. Imagine what these fans would consume – food and beverages, recharge cards, merchandising items, etc. Multiply that by ten centres and imagine the commerce created across Nigeria and where all the money goes.    

Given the current TSA directive, I think the time has come for a consortium of banks, and probably other successful businesses, to come together to float a massive intervention fund and work with the LMC and the Nigeria Football Federation to transform our football. The consortium provides the financial guarantee for 10 years of uninterrupted high stakes football, while the LMC ensures the highest standards in planning and managing the league. With both working together, we will almost immediately see a ballooning of quality in playing staff and competition, the return of the fans, and the spike in sponsorship revenues as well as the increase in the value of TV Rights.

While government would remain a vital stakeholder, it is unlikely the civil service can ever run clubs competitively in a high stakes NPFL. We would likely see our state governments divest and private investors move into the ownership and running of clubs. The new players will pump in billions into investments in youth talents, in bringing in quality talents from around the continent, in hiring top local and foreign coaches, in marketing and brand building, etc. Our clubs can then attract kit sponsors like Adidas, Nike, Pumas and the like. They can then partner foreign clubs who pay them annually to develop talents and provide them with free technical assistance.

Today our banks spend to promote the European game to Nigerians. It is silly, because whereas they think they are trying to reach audiences in large numbers locally, they are ultimately strengthen their international rivals and weakening their own businesses. The time has come for us to reverse the order. Let us reinvest in our football and get a share of the billions crisscrossing the globe in search of football investments.

Next week I would attempt an amount for the intervention fund and where the returns will come from. You are welcome to leave a comment below or you may wish to tweet at Africaplays or hit me up on Facebook.